GAO examines housing fraud schemes, federal anti-fraud regulations

The Government Accountability Office (GAO) released a report Monday that examined the potential of housing fraud schemes and federal regulations designed to combat such.

GAO officials said the Department of Housing and Urban Development (HUD) provides rental assistance to low-income households through its $20 billion HCV program, which is administered locally by approximately 2,200 Public Housing Agencies (PHAs) nationwide. HUD said PHAs have issued alerts about criminals targeting program participants with fraud schemes, such as by claiming to offer admission to the program for a fee.

The GAO’s survey of PHAs representing approximately 1.9 million households revealed PHAs reported few incidents of the various fraud types, although side-payment fraud, a program violation, was noted most frequently.

GAO officials estimated while 41 percent of PHAs were aware of instances of side-payment fraud in the prior year, most reported two to five incidents in the prior year while 3 to 10 percent of PHAs were aware of instances of the other types of fraud GAO identified.

HUD and PHAs’ anti-fraud regulations, guidance and information largely focus on efforts to protect the HCV program, the GAO survey referenced, noting PHAs are required by HUD to inform families of program-related fraud and abuse, including the prohibition against side payments.

The GAO said several PHAs voluntarily provide targeted messages to participants about fraud schemes by outside parties. Through industry associations, PHAs have mechanisms through which they share best practices that could include these and other issues.

GAO officials said the agency did not make any recommendations in its report and HUD had no comments on the report’s draft.